This document includes House Committee Amendments incorporated into the bill on Wed, Mar 4, 2020 at 8:14 AM by pflowers.
1     
SMALL BUSINESS JOB CREATION TAX CREDIT ACT

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Curtis S. Bramble

5     
House Sponsor: Mike Schultz

6     

7     LONG TITLE
8     General Description:
9          This bill enacts the Small Business Job Creation Tax Credit Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     provides a state nonrefundable tax credit for investments by Small Business Job
14     Creation funds in eligible businesses;
15          ▸     authorizes the state to approve tax credits on up to $30,000,000 invested in eligible
16     businesses in the state;
17          ▸     provides the requirements for receiving a tax credit certificate from the Governor's
18     Office of Economic Development related to a contribution to a Small Business Job
19     Creation fund investing in eligible businesses;
20          ▸     provides the reporting requirements for a Small Business Job Creation fund
21     investing in eligible businesses; and
22          ▸     provides the requirements for a Small Business Job Creation fund exiting the
23     program.
24     Money Appropriated in this Bill:
25          None
26     Other Special Clauses:
27          None

28     Utah Code Sections Affected:
29     ENACTS:
30          59-7-625, Utah Code Annotated 1953
31          59-10-1041, Utah Code Annotated 1953
32          63N-2-901, Utah Code Annotated 1953
33          63N-2-902, Utah Code Annotated 1953
34          63N-2-903, Utah Code Annotated 1953
35          63N-2-904, Utah Code Annotated 1953
36          63N-2-905, Utah Code Annotated 1953
37          63N-2-906, Utah Code Annotated 1953
38          63N-2-907, Utah Code Annotated 1953
39          63N-2-908, Utah Code Annotated 1953
40          63N-2-909, Utah Code Annotated 1953
41     

42     Be it enacted by the Legislature of the state of Utah:
43          Section 1. Section 59-7-625 is enacted to read:
44          59-7-625. Nonrefundable small business job creation tax credit.
45          (1) As used in this section, "office" means the Governor's Office of Economic
46     Development created in Section 63N-1-201.
47          (2) Subject to the other provisions of this section, a taxpayer may claim a
48     nonrefundable tax credit for job creation as provided in this section.
49          (3) The tax credit under this section is the amount listed as the tax credit amount on a
50     tax credit certificate that the office issues under Title 63N, Chapter 2, Part 9, Small Business
51     Job Creation Tax Credit Act, to the taxpayer for the taxable year.
52          (4) A taxpayer may carry forward a tax credit under this section for the next seven
53     taxable years if the amount of the tax credit exceeds the taxpayer's tax liability under this
54     chapter for the taxable year in which the taxpayer claims the tax credit.
55          Section 2. Section 59-10-1041 is enacted to read:
56          59-10-1041. Nonrefundable small business job creation tax credit.
57          (1) As used in this section, "office" means the Governor's Office of Economic
58     Development created in Section 63N-1-201.

59          (2) Subject to the other provisions of this section, a taxpayer may claim a
60     nonrefundable tax credit for job creation as provided in this section.
61          (3) The tax credit under this section is the amount listed as the tax credit amount on a
62     tax credit certificate that the office issues under Title 63N, Chapter 2, Part 9, Small Business
63     Job Creation Tax Credit Act, to the taxpayer for the taxable year.
64          (4) A taxpayer may carry forward a tax credit under this section for the next seven
65     taxable years if the amount of the tax credit exceeds the taxpayer's tax liability under this
66     chapter for the taxable year in which the taxpayer claims the tax credit.
67          Section 3. Section 63N-2-901 is enacted to read:
68     
Part 9. Small Business Job Creation Tax Credit Act

69          63N-2-901. Title.
70          This part is known as the "Small Business Job Creation Tax Credit Act."
71          Section 4. Section 63N-2-902 is enacted to read:
72          63N-2-902. Definitions.
73          As used in this part:
74          (1) (a) "Affiliate" means a person that directly, or indirectly through one or more
75     intermediaries, controls, is controlled by, or is under common control with another person.
76          (b) For the purposes of this part, a person controls another person if the person holds,
77     directly or indirectly, the majority voting or ownership interest in the controlled person or has
78     control over the day-to-day operations of the controlled person by contract or by law.
79          (2) "Claimant" means a resident or nonresident person that has state taxable income.
80          (3) "Closing date" means the date on which a Small Business Job Creation fund has
81     collected all of the investments described in Subsection 63N-2-903(7).
82          (4) "Credit-eligible contribution" means an investment of cash by a claimant in a Small
83     Business Job Creation fund that:
84          (a) is or will be eligible for a tax credit as evidenced by notification issued by the office
85     under Subsection 63N-2-903(5)(c); and
86          (b) shall purchase an equity interest in the Small Business Job Creation fund or
87     purchase, at par value or premium, a debt instrument issued by the Small Business Job
88     Creation fund that has a maturity date at least five years after the closing date.
89          (5) "Eligible business" means a business that at the time of an initial Small Business

90     Job Creation investment in the business by a Small Business Job Creation fund:
91          (a) has fewer than 300 employees;
92          (b) has less than $10,000,000 in net income for the preceding taxable year;
93          (c) maintains the business's principal business operations in the state; and
94          (d) is described in one or more NAICS codes within the following NAICS Sectors of
95     the 2017 North American Industry Classification System of the federal Executive Office of the
96     President, Office of Management and Budget:
97          (i) 11, Agriculture, Forestry, Fishing and Hunting;
98          (ii) 21, Mining, Quarrying, and Oil and Gas Extraction;
99          (iii) 22, Utilities;
100          (iv) 23, Construction;
101          (v) 31-33, Manufacturing;
102          (vi) 48-49, Transportation and Warehousing;
103          (vii) 54, Professional, Scientific, and Technical Services; or
104          (viii) 62, Health Care and Social Assistance.
105          (6) (a) "Excess return" means the difference between:
106          (i) the present value on the day the Small Business Job Creation fund applies to exit the
107     program under Section 63N-2-909 of all Small Business Job Creation investments made by a
108     Small Business Job Creation fund, including the present value of all distributions and gains
109     from the Small Business Job Creation investments; and
110          (ii) the sum of the amount of the original Small Business Job Creation investment and
111     an amount equal to any projected increase in an equity holder's federal or state tax liability,
112     including penalties and interest, related to an equity holder's ownership, management, or
113     operation of the Small Business Job Creation fund.
114          (b) If the amount calculated in Subsection (6)(a) is less than zero, the excess return is
115     equal to zero.
116          (7) (a) "Full-time employee" means an employee that works at least 30 hours per week
117     throughout the year or meets the customary practices accepted by an industry as full time.
118          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
119     office may make rules that establish additional hour or other criteria to determine what
120     constitutes a full-time employee.

121          (8) (a) "High wage" means a wage that is at least 100% of the county living wage.
122          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
123     office may make rules that establish additional criteria to determine what constitutes a high
124     wage.
125          (9) "Investment authority" means the minimum amount of investment a Small Business
126     Job Creation fund must make in eligible businesses in order for credit-eligible contributions to
127     the Small Business Job Creation fund to qualify for a Small Business Job Creation tax credit
128     under Section 59-7-625 or 59-10-1041.
129          (10) (a) "New annual jobs" means the difference between:
130          (i) (A) the monthly average of full-time employees who are paid a high wage at an
131     eligible business for the preceding calendar year; or
132          (B) if the preceding calendar year contains the initial Small Business Job Creation
133     investment, the monthly average of full-time employees who are paid a high wage at an eligible
134     business for the months including and after the initial Small Business Job Creation investment
135     and before the end of the preceding calendar year; and
136          (ii) the number of full-time employees at the eligible business on the date of the initial
137     Small Business Job Creation investment.
138          (b) If the amount calculated in Subsection (10)(a) is less than zero, the new annual jobs
139     amount is equal to zero.
140          (11) "Offset" means the amount calculated for each annual report as described in
141     Subsection 63N-2-907(2)(b).
142          (12) "Opportunity zone" means an area that has been designated as a qualified
143     opportunity zone in the state under Section 1400Z-1, Internal Revenue Code.
144          (13) (a) "Principal business operations" means the location where at least 60% of a
145     business's employees work or where employees that are paid at least 60% of a business's
146     payroll work.
147          (b) For the purposes of this part, an out-of-state business that agrees to relocate
148     employees to this state to establish the business's principal business operations in this state
149     using the proceeds of a Small Business Job Creation investment is considered to have the
150     business's principal business operations in this state if the business satisfies the requirements of
151     Subsection (13)(a) within 180 days after receiving the Small Business Job Creation investment,

152     unless the office agrees to a later date.
153          (14) "Program" means the provisions of this part applicable to a Small Business Job
154     Creation fund.
155          (15) (a) "State reimbursement amount" means the difference between:
156          (i) a Small Business Job Creation fund's credit-eligible capital contributions; and
157          (ii) the sum of the annual Small Business Job Creation offsets as reported in the Small
158     Business Job Creation fund's exit report described in Section 63N-2-909.
159          (b) If the amount calculated in Subsection (15)(a) is less than zero, the state
160     reimbursement amount is equal to zero.
161          (16) "Tax credit" means a tax credit created by Section 59-7-625 or 59-10-1041.
162          (17) "Tax credit certificate" means a certificate issued by the office that:
163          (a) lists the name of the person to which the office authorizes a tax credit;
164          (b) lists the person's taxpayer identification number;
165          (c) lists the amount of tax credit that the office authorizes the person to claim for the
166     taxable year; and
167          (d) may include other information as determined by the office.
168          (18) "Tier one job" means a new annual job held by an employee who:
169          (a) served in the active military, naval, or air service and who was discharged or
170     released under conditions other than dishonorable;
171          (b) suffers from a disability; Ĥ→ or ←Ĥ
172          (c) was found guilty of a crime and sentenced by a court to a prison term Ĥ→ . [
; or
173          (d) was not a resident of Utah within the 12 months prior to holding the job.
] ←Ĥ

174          (19) "Tier three job" means all new annual jobs that are not tier one jobs or tier two
175     jobs.
176          (20) "Tier two job" means a new annual job held by an employee who received or had
177     a family member who received, with neither still receiving, benefits under Utah Medicaid, Utah
178     Unemployment Insurance, the Utah Supplemental Nutrition Assistance Program, the Utah
179     Children's Health Insurance Program, Utah Head Start, or Utah Family Employment Program.
180          (21) "Small Business Job Creation fund" means a person approved by the office under
181     Section 63N-2-903.
182          (22) "Small Business Job Creation investment" means:

183          (a) any capital or equity investment in an eligible business; or
184          (b) any loan made from the investment authority to an eligible business with a stated
185     maturity at least one year after the date of issuance.
186          Section 5. Section 63N-2-903 is enacted to read:
187          63N-2-903. Application, approval, and allocations.
188          (1) (a) A person seeking approval as a Small Business Job Creation fund shall submit
189     an application to the office.
190          (b) The office shall begin accepting applications on November 1, 2020.
191          (2) An application submitted under Subsection (1) shall be in a form and in accordance
192     with procedures prescribed by the office and shall include the following:
193          (a) the total investment authority sought by the applicant, which may not exceed
194     $40,000,000;
195          (b) a copy of the applicant's or an affiliate of the applicant's license as a federally
196     licensed rural business investment company or as a federally licensed small business
197     investment company, provided that any affiliate used to meet this requirement must have been
198     an affiliate of the applicant or its affiliates for at least four years;
199          (c) evidence that before the date the application is submitted, the applicant or affiliates
200     of the applicant have met the job creation requirements of any tax credit or similar state
201     government program or grant agreement;
202          (d) a signed affidavit from each claimant that commits to make a credit-eligible capital
203     contribution to the applicant, stating the amount of that commitment; and
204          (e) the sum of all credit-eligible capital contribution commitments described in
205     Subsection (2)(d), which must equal 75% of the total investment authority sought by the
206     applicant.
207          (3) The office shall:
208          (a) review and evaluate each application submitted under this section within 30 days
209     after receiving the application in the order in which the application is received; and
210          (b) consider applications received on the same day to have been received
211     simultaneously.
212          (4) (a) If, after review and evaluation of an application, the office determines that the
213     application does not meet the requirements of Subsection (2), the office shall:

214          (i) deny the application; or
215          (ii) if the applicant complied with Subsection (2)(d):
216          (A) notify the applicant that the application was inadequate and allow the applicant to
217     provide additional information to the office to complete, clarify, or cure defects identified by
218     the office in the application; and
219          (B) inform the applicant that the additional information described in Subsection
220     (4)(a)(ii)(A) must be received by the office within five days after the notice in order to be
221     considered.
222          (b) If an applicant submits additional information to the office in accordance with
223     Subsection (4)(a)(ii), the office shall:
224          (i) consider the application to have been received on the date the application was
225     originally received by the office; and
226          (ii) review and evaluate the additional information within 10 days after receiving the
227     additional information.
228          (5) If, after review and evaluation of an application submitted under this section and
229     any additional information submitted in accordance with Subsection (4)(a)(ii), the office
230     determines that the application meets the requirements of Subsection (2), the office shall:
231          (a) determine the amount of investment authority to award an applicant in accordance
232     with Subsection (6);
233          (b) provide to the applicant a written notice of approval as a Small Business Job
234     Creation fund, specifying the amount of the applicant's investment authority; and
235          (c) notify each claimant whose affidavit was included in the application under
236     Subsection (2)(d) that the claimant qualifies for a tax credit that will be issued in accordance
237     with Section 63N-2-904.
238          (6) (a) The office may not approve more than $40,000,000 in total investment authority
239     and not more than $30,000,000 in total credit-eligible contributions under this part.
240          (b) Subject to Subsections (6)(a) and (d), if an application is approved under
241     Subsection (5), the office shall approve the amount of investment authority requested on the
242     application.
243          (c) The office may continue to accept applications under this section until the amount
244     of approved investment authority reaches $40,000,000.

245          (d) If the office approves multiple applications received simultaneously under
246     Subsection (3)(b) and the total amount of investment authority requested on those applications
247     exceeds the amount of investment authority remaining, the office shall proportionally reduce
248     the investment authority and credit-eligible capital contributions for each of these applications
249     as necessary to avoid exceeding the amount of investment authority and credit-eligible capital
250     contributions remaining.
251          (7) Within 65 days after the day on which a Small Business Job Creation fund receives
252     approval under Subsection (5)(b), the Small Business Job Creation fund shall:
253          (a) collect the total amount of committed credit-eligible capital contributions from each
254     claimant whose affidavit was included in the application under Subsection (2)(d);
255          (b) collect one or more cash equity investments contributed by affiliates of the Small
256     Business Job Creation fund, including employees, officers, and directors of such affiliates, that
257     equal at least 10% of the Small Business Job Creation fund's investment authority;
258          (c) collect one or more cash investments that, when added to the amounts collected
259     under Subsections (7)(a) and (b), equal the Small Business Job Creation fund's investment
260     authority; and
261          (d) provide sufficient documentation to the office to prove that the amounts described
262     in Subsections (7)(a) through (c) have been collected.
263          (8) If the Small Business Job Creation fund fails to fully comply with Subsection (7):
264          (a) the Small Business Job Creation fund's approval shall lapse and the corresponding
265     investment authority and credit-eligible capital contributions shall not count toward the limits
266     on the program size described in Subsection (6)(a); and
267          (b) the office:
268          (i) shall first award lapsed investment authority pro rata to each Small Business Job
269     Creation fund that was awarded less than the requested investment authority under Subsection
270     (6)(d), which a Small Business Job Creation fund may allocate to the Small Business Job
271     Creation fund's investors at the fund's discretion; and
272          (ii) may award any remaining investment authority to new applicants.
273          Section 6. Section 63N-2-904 is enacted to read:
274          63N-2-904. Tax credit.
275          (1) On the closing date, a claimant whose affidavit was included in an approved

276     application submitted under Section 63N-2-903 shall earn a vested tax credit equal to the
277     amount of the claimant's credit-eligible capital contribution to the Small Business Job Creation
278     fund.
279          (2) In each of the taxable years that includes the fourth through sixth anniversaries of
280     the closing date, the office shall:
281          (a) issue a tax credit certificate to each approved claimant, specifying a tax credit
282     amount for the taxable year equal to one-third of the claimant's total credit-eligible capital
283     contribution; and
284          (b) provide a report to the State Tax Commission listing each claimant that received a
285     tax credit certificate under Subsection (2)(a) and the tax credit amount listed on the certificate.
286          (3) (a) A claimant may not claim a tax credit under this section unless the claimant has
287     a tax credit certificate issued by the office.
288          (b) A claimant claiming a credit under this section shall retain a tax credit certificate
289     the claimant receives from the office for the same time period a person is required to keep
290     books and records under Section 59-1-1406.
291          (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
292     consistent with the provisions of this part, the office shall make rules describing:
293          (a) the documentation requirements for a claimant to receive a tax credit certificate
294     under this section; and
295          (b) administration of the program, including relevant timelines and deadlines.
296          Section 7. Section 63N-2-905 is enacted to read:
297          63N-2-905. Revocation of tax credit certificates.
298          (1) Except as provided in Subsection (2), the office shall revoke a tax credit certificate
299     issued under Section 63N-2-904 if the Small Business Job Creation fund in which the
300     credit-eligible capital contribution was made does any of the following before the Small
301     Business Job Creation fund exits the program in accordance with Section 63N-2-909:
302          (a) fails to invest two-thirds of the Small Business Job Creation fund's investment
303     authority in Small Business Job Creation investments in this state within two years of the
304     closing date and 100% within three years;
305          (b) fails to maintain Small Business Job Creation investments in this state equal to
306     100% of the Small Business Job Creation fund's investment authority until the sixth

307     anniversary of the closing date in accordance with this section;
308          (c) makes a distribution or payment that results in the Small Business Job Creation
309     fund having less than 100% of the Small Business Job Creation fund's investment authority
310     invested in Small Business Job Creation investments in this state or available for investment in
311     Small Business Job Creation investments and held in cash and other marketable securities;
312          (d) invests more than $5,000,000 from the investment authority in the same eligible
313     business, including amounts invested in affiliates of the eligible business, exclusive of Small
314     Business Job Creation investments made with repaid or redeemed Small Business Job Creation
315     investments or interest or profits realized on the repaid or redeemed Small Business Job
316     Creation investments; or
317          (e) makes a Small Business Job Creation investment in an eligible business that
318     directly or indirectly through an affiliate:
319          (i) owns or has the right to acquire an ownership interest in the Small Business Job
320     Creation fund, an affiliate of the Small Business Job Creation fund, or an investor in the Small
321     Business Job Creation fund; or
322          (ii) makes a loan to or an investment in the Small Business Job Creation fund, an
323     affiliate of the Small Business Job Creation fund, or an investor in the Small Business Job
324     Creation fund.
325          (2) (a) (i) For the purposes of Subsection (1), an investment is maintained even if the
326     investment is sold or repaid if the Small Business Job Creation fund reinvests an amount equal
327     to the capital returned or recovered by the Small Business Job Creation fund from the original
328     investment, excluding any profits realized, in other Small Business Job Creation investments in
329     this state within 12 months of the receipt of such capital.
330          (ii) Amounts received periodically by a Small Business Job Creation fund are treated as
331     continually invested in Small Business Job Creation investments if the amounts are reinvested
332     in one or more Small Business Job Creation investments by the end of the following calendar
333     year.
334          (iii) A Small Business Job Creation fund is not required to reinvest capital returned
335     from Small Business Job Creation investments after the fifth anniversary of the closing date
336     and such Small Business Job Creation investments are considered as being held continuously
337     by the Small Business Job Creation fund through the seventh anniversary of the closing date.

338          (b) (i) Subsection (1)(e) does not apply to investments in publicly traded securities by
339     an eligible business or an owner or affiliate of an eligible business.
340          (ii) Under Subsection (1)(e), a Small Business Job Creation fund is not considered an
341     affiliate of an eligible business solely as a result of the Small Business Job Creation fund's
342     Small Business Job Creation investment.
343          (3) (a) Before revoking one or more tax credit certificates under this section, the office
344     shall notify the Small Business Job Creation fund of the reasons for the pending revocation.
345          (b) If the Small Business Job Creation fund corrects any violation outlined in the notice
346     to the satisfaction of the office within 90 days after the day on which the notice was sent, the
347     office may not revoke the tax credit certificate.
348          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
349     office may make rules that establish criteria to determine what constitutes a correction under
350     Subsection (3)(b).
351          (4) If a Small Business Job Creation fund's tax credit certificates are revoked under this
352     section:
353          (a) (i) the Small Business Job Creation fund shall make a cash distribution to the office
354     in an amount equal to the sum of all tax credits awarded to persons that have made
355     credit-eligible contributions to the Small Business Job Creation fund; and
356          (ii) if the Small Business Job Creation fund is able to provide documentation to the
357     office that proves that a tax credit described in Subsection (4)(a)(i) has not been claimed, the
358     amount owed under Subsection (4)(a)(i) shall be reduced by the amount of the unclaimed tax
359     credit;
360          (b) the Small Business Job Creation fund's investment authority and credit-eligible
361     capital contributions shall not count toward the limits on the program size described in
362     Subsection 63N-4-503(6)(a); and
363          (c) (i) the office shall, if the office awards lapsed investment authority to a Small
364     Business Job Creation fund, first award lapsed investment authority pro rata to each Small
365     Business Job Creation fund that was awarded less than the requested investment authority
366     under Subsection 63N-4-903(6)(d), which a Small Business Job Creation fund may allocate to
367     the Small Business Job Creation fund's investors at the Small Business Job Creation fund's
368     discretion; and

369          (ii) the office may award any remaining investment authority to new applicants.
370          (5) The office may not revoke a tax credit certificate after a Small Business Job
371     Creation fund has exited the program in accordance with Section 63N-2-909.
372          Section 8. Section 63N-2-906 is enacted to read:
373          63N-2-906. Request for determination.
374          (1) Before making a Small Business Job Creation investment, a Small Business Job
375     Creation fund may request from the office a written determination as to whether the business in
376     which a Small Business Job Creation fund proposes to invest is an eligible business.
377          (2) The office shall notify the Small Business Job Creation fund of the office's
378     determination within 30 days after receipt of the request.
379          (3) If the office fails to notify the Small Business Job Creation fund of the office's
380     determination in accordance with Subsection (2), the business in which the Small Business Job
381     Creation fund proposes to invest shall be considered an eligible business.
382          Section 9. Section 63N-2-907 is enacted to read:
383          63N-2-907. Reporting obligations.
384          (1) Until the Small Business Job Creation fund has exited the program in accordance
385     with Section 63N-2-909, a Small Business Job Creation fund shall annually submit to the
386     office on or before the last day of February a report for the previous calendar year.
387          (2) (a) The annual report shall include documentation of the Small Business Job
388     Creation fund's Small Business Job Creation investments, including:
389          (i) a bank statement evidencing each Small Business Job Creation investment;
390          (ii) the name, location, and industry of each business receiving a Small Business Job
391     Creation investment, including a determination letter provided as described in Section
392     63N-2-906 or evidence that the business qualified as an eligible business at the time the
393     investment was made;
394          (iii) the number of new annual jobs at each eligible business for the preceding calendar
395     year, accompanied by a report from a third-party accounting firm attesting that the number of
396     new annual jobs was calculated in accordance with procedures approved by the office;
397          (iv) the offset, calculated annually and in accordance with Subsection (2)(b); and
398          (v) any other information required by the office.
399          (b) Ĥ→ [
(i)] ←Ĥ The offset shall equal the sum of the Ĥ→ [following:] amounts
399a     calculated in Subsections (2)(c) through (g). ←Ĥ

400          Ĥ→ [
(A) the] (c) The ←Ĥ product of the number of new annual jobs that are tier one jobs
400a     and $40,000 Ĥ→ [
;] . ←Ĥ
401          Ĥ→ [
(B) the] (d) The ←Ĥ product of the number of new annual jobs that are tier two jobs
401a     and $30,000 Ĥ→ [
;] . ←Ĥ
402     Ĥ→ [
and
403          (C) the product of the number of new annual jobs that are tier three jobs and $20,000.
404          (ii) A $10,000 bonus shall be added to the offset for each of the following:
405          (A) each new annual job at an eligible business whose principal business operations are
406     located in an opportunity zone; and
407          (B) each new annual job held by an employee who has received workforce training
408     either internally or externally, provided such training is verified by the president, chief
409     executive officer, chief financial officer, or similar officer of the eligible business and approved
410     by the office.
]

410a          (e) The product of $10,000 and the number of new annual jobs that are:
410b          (i) tier one or tier two jobs; and
410c          (ii) at an eligible business whose principal business operations are located in an
410d     opportunity zone;
410e          (f) The product of $10,000 and the number of new annual jobs that are:
410f          (i) tier one or tier two jobs; and
410g          (ii) held by an employee who has received workforce training either internally or
410h     externally, provided such training is verified by the president, chief executive officer, chief
410i     financial officer, or similar officer of the eligible business and approved by the office.
410j          (g) The lesser of:
410k          (i) the sum of the following:
410l          (A) the product of the number of new annual jobs that are tier three jobs and $20,000;
410m          (B) the product of $10,000 and the number of tier three jobs that are at an eligible
410n     business whose principal business operations are located in an opportunity zone; and
410o          (C) the product of $10,000 and the number of tier three jobs that are held by an
410p     employee who has received workforce training either internally or externally, provided such
410q     training is verified by the president, chief executive officer, chief financial officer, or similar
410r     officer of the eligible business and approved by the office; or
410s          (ii) 17% of the sum of the amounts calculated in Subsections (2)(c) through (f). ←Ĥ
411          (3) Within 60 days after receipt of an annual report, the office shall provide written
412     confirmation to the Small Business Job Creation fund of the offset and the number of new
413     annual jobs the Small Business Job Creation fund has been credited with for the previous
414     ☆calendar year.
415          (4) By the fifth business day after the third anniversary of the closing date, a Small
416     Business Job Creation fund shall submit a report to the office providing evidence that the Small
417     Business Job Creation fund is in compliance with the investment requirements of Section
418     63N-2-905.
419          Section 10. Section 63N-2-908 is enacted to read:
420          63N-2-908. Annual fee.
421          (1) The office shall calculate an annual fee to be paid by each Small Business Job
422     Creation fund by dividing $50,000 by the number of Small Business Job Creation funds
423     approved under this part and notify each Small Business Job Creation fund of the amount of
424     the annual fee.
425          (2) (a) The initial annual fee shall be due and payable to the office along with the
426     evidence of receipt of the cash investment in the Small Business Job Creation fund as
427     described in Subsection 63N-2-903(7)(d).
428          (b) After the initial annual fee, an annual fee shall be due and payable to the office on
429     or before the last day of February of each year.
430          (c) An annual fee shall not be required once a Small Business Job Creation fund has

431     exited the program under Section 63N-2-909.
432          (3) To maintain an aggregate annual fee of $50,000, the office shall recalculate the
433     annual fee as needed upon the lapse of any approval under Subsection 63N-2-903(8), the
434     revocation of tax credit certificates under Section 63N-2-905, or a Small Business Job Creation
435     fund's exit from the program under Section 63N-2-909.
436          (4) The annual fee collected under this section shall be deposited into the General Fund
437     as a dedicated credit for use by the office to implement this part.
438          Section 11. Section 63N-2-909 is enacted to read:
439          63N-2-909. Exit.
440          (1) On or after the seventh anniversary of the closing date, a Small Business Job
441     Creation fund may apply to the office to exit the program and no longer be subject to this part.
442          (2) An application submitted under Subsection (1) shall be in a form and in accordance
443     with procedures prescribed by the office and shall include a calculation of the state
444     reimbursement amount and the total of all offsets reported in annual reports pursuant to
445     Subsection 63N-2-907(2)(a).
446          (3) In evaluating the exit application, if no tax credit certificates have been revoked and
447     the Small Business Job Creation fund has not received a notice of revocation that has remained
448     uncorrected under Subsection 63N-2-905(3)(b), the Small Business Job Creation fund is
449     eligible for exit.
450          (4) (a) The office shall respond to the application within 30 days after receipt and
451     include confirmation of the state reimbursement amount.
452          (b) The office shall not unreasonably deny an application submitted under this section.
453          (c) If the office denies the application, the office shall provide the reasons for the
454     determination to the Small Business Job Creation fund.
455          (5) Within 60 days after the day on which the confirmation of the state reimbursement
456     amount is received by the Small Business Job Creation fund, the Small Business Job Creation
457     fund shall make a cash distribution to the state in an amount equal to the lesser of:
458          (a) the state reimbursement amount; and
459          (b) the excess return.
460          (6) The office shall notify the Small Business Job Creation fund once payments equal
461     to the amount described in Subsection (5) have been received.

462          (7) Any amounts collected under this section shall be deposited into the General Fund.